PEI: PE fundraising continued uptick in 2016

The 10 largest fund closes last year raised $92bn, surpassing the $86bn in 2015 and showing the asset class continues to attract capital in a low-growth environment.

At a time when investors are searching for yield, private equity, as one of the best-performing asset classes, is not struggling to attract capital.

The 10 largest fund closes in 2016 raised a staggering aggregate amount of $92.12 billion, which represented an increase of $5.9 billion, or 7 percent, from 2015. (Click here to see the chart above in detail.)

By comparison, the top 10 biggest fund closes in 2015 pooled together a total of $86.22 billion, according to data from Private Equity International.

The largest fund close, which was executed by Paris-based Ardian for its $14 billion Ardian Secondary Fund VII, was smaller than the $18 billion raised for Blackstone’s Blackstone Capital Partners VII in 2015.

However, the median fund size in 2016 was $8.43 billion, up from a median amount of $7.28 billion in 2015, according to PEI data.

Average 2016 fund sizes were larger, as well. In 2016, there were 664 funds that closed on an aggregate amount of $427.98 billion, versus 720 funds on $427.38 billion in 2015, indicating that fewer funds last year raised slightly more capital than in the preceding year.

Although the aggregate amount still pales in comparison to the whopping $533 billion raised in 2008, the numbers seem to show that fundraising is again gaining momentum.

After a post-crisis peak of $458.3 billion in 2013, fundraising volumes sharply fell in 2014 to $426.5 billion, but have been gradually inching up since then. 

Peter Martenson, partner at placement agent Eaton Partners, told PEI earlier this month that he anticipates 2017 to be another strong, if not stronger, fundraising year. He referred to “a lot of pent-up demand” going into the new year, resulting from some investors holding back throughout 2016’s volatility and uncertainty – marked by events such as Brexit and the US election.

Here are the 10 largest fund closes of 2016, according to PEI data:

• Ardian Secondary Fund VII, $14 billion
• Advent International Global Private Equity VIII, $13 billion
• TPG Partners VII, $10.5 billion
• Green Equity Investors VII, $9.6 billion
• Apax IX, $9 billion
• Ares Corporate Opportunities Fund V, $7.85 billion
• Thoma Bravo Fund XII, $7.6 billion
• The Sixth Cinven Fund, $7.28 billion
• Blackstone Tactical Opportunities Fund II, $6.69 billion
• Highbridge Principal Strategies – Mezzanine Partners III, $6.6 billion